British Financier Sentenced To 15 Years In Fraud Case

November 20, 1987|By Dan Tracy of The Sentinel Staff

Alex Herbage, the rotund British businessman accused of cheating 3,000 investors out of more than $38 million, was sentenced to 15 years in prison Thursday after pleading guilty to three counts of fraud.

Herbage, however, took the stand in U.S. District Court in Orlando and testified that he never meant to cheat anyone.

''I deny totally that I ever had any intention to fraudulently obtain investor funds,'' he said, shortly before Judge Patricia Fawsett gave him the maximum penalty for his crime.

Fawsett admonished Herbage for using his ''uncommon'' intelligence and abilities to steal from people worldwide.

''You could have easily used your talents in full conformity with the law,'' she said.

Herbage, 57, had faced up to 135 years in prison, but changed his plea from not guilty in August in exchange for reduced charges. He admitted only to sending false accounting statements to at least three investors showing they were making money at a time when they were losing.

Under federal sentencing guidelines Herbage can be released after serving one-third of his sentence, meaning he could be free in less than three years. Fawsett gave him credit for the 27 months he has spent in jail awaiting trial. Restitution is unlikely, said Roger Hoddinott, the British police detective superintendent who led the investigation of Herbage and was in Orlando for the sentencing.

Hoddinott said he would be surprised if more than $8.8 million was recovered by British officials looking into Herbage's failed business empire, which was built around a holding company named Caprimex.

Herbage, who has declared bankruptcy, was charged in 1984 by British and American law enforcement agents with running a Ponzi scheme, in which early investors are paid off with money from newer victims.

Authorities said he attracted funds in 1978 through a newsletter he published promising returns of up to 35 percent by investing in gold, silver and agricultural products.

Herbage, officials said, actually used the money for himself, buying expensive paintings and cars, plus luxurious homes in Paris, Scotland and near London.

Herbage's wife, Maria, who flew from England for the hearing, took the stand to say her husband has been humbled by prison.

''On the whole, if I could put it in an English term, 'he's been taught a lesson,' '' said Mrs. Herbage, a diminutive clerk dressed in a conservative blazer and skirt.

On the plus side, she said, her husband has lost a lot of weight, which has improved his health.

Herbage, nicknamed the ''fat man'' by the British press, once weighed more than 500 pounds, but has dropped about 150 pounds since his jailing. In court, he wore a gray suit that appeared to be too large for his portly frame.

His attorneys, Jay Stevens and Joel Remland of the federal Public Defender's Office in Orlando, had asked that Herbage be freed because he had been in jail for more than two years, including 15 months in what the defendant called a ''lunatic's asylum'' in London.

''He's suffered grievously as a result of his actions,'' Stevens said. ''The time Mr. Herbage has served has been very hard time.''

Stevens and Remland walked briskly from the courtroom after the sentencing and declined comment.

Assistant U.S. Attorney Robert Twiss, a lawyer with the Justice Department in Washington and the lead prosecutor, said he was ''pleased'' with the sentence, but would not elaborate.

One of Herbage's victims, a 69-year-old retired film distributor from Englewood, near Sarasota, said he was satisfied with the time Herbage received.

''I'm not happy about what happened to me. . . . But it's water under the bridge,'' said the man, who asked that his name not be used.

The case was handled in Orlando because 14 of the investors who lost money to Herbage were from Central Florida.